Q: There’s a real estate company that is buying homes, doing rehabbing and then selling. The latest in our community is for this company to allow customers to access the residence and do a self-guided tour. Our homeowners association community is gated. We don’t even allow vendor codes to be posted on the Multiple Listing Service. We expect agents to meet customers at the gate and escort them to and from the house. Customers would not need a code this way.
This company wants a vendor code to give out to unescorted customers. With this new procedure, a stranger (to us) would have the ability to enter the community at will. Luckily, we do have the ability to limit vendor code access to specific time periods such as 9 a.m. to 5 p.m. And how many home invasions are done during daylight hours?
We balked at issuing a vendor code and they countered with wanting several of their agents listed on the directory so a customer could contact them even though they’re not on-site and get buzzed in. We still don’t like that but it’s a little better. Customers would at least have to contact an agent first for specific access instead of having a set of keys in the form of a vendor code that would allow them free access.
We’re looking for a solution. Can we insist on escorted visits to properties on the market? On paper, a “customer” is unknown to the HOA and could be construed as trespassing. Whaddaya think? Got a rabbit or two that you could pull out of a hat as a killer solution? As usual, thanks in advance.
A: This association should discuss this issue with legal counsel. If it is not in violation of the association’s governing documents, I think licensed real estate salespeople or property managers need to meet their customers. I would not like my association to allow unescorted customers wandering on my streets.
Q: I read an article in the Review-Journal and thought I’d ask a question.
Is there a way to prevent short-term rentals or bed and breakfast (operations) from being established in an HOA community?
I would appreciate a reply, as it would help my neighbors feel better knowing the answer to those questions.
A: Associations will need to have strong policies and procedures as well as support from their governing documents in dealing with these short-term rentals. Communication to your homeowners is important. Depending upon your policy (see your association attorney), strong enforcement actions are needed. Homeowners need to know the consequences that your association is willing to take when a short-term rental is found. If the consequences are strong enough, they may discourage homeowners from initiating a short-term rental such. This could include notifying the municipality and contacting the department of taxation, etc.
No law or association will prevent short-term rentals but strong enforcement can discourage them at your community.
NOTE: I have asked local attorney William Wright to weigh in on how an HOA board should operate. We often have that “independent” board member who does not work as a team member and often makes individual decisions without approval of the full board.
Consequently, when that board member makes a decision or authorizes action to a community manager or to a contractor, the board often finds itself reacting to that decision or action that requires the association to obtain legal counsel to respond on behalf of the association.
Common-interest attorneys normally do not, in fact, represent the board, individual board members, or the owners. Our client is the corporation whose articles are filed with the Nevada Secretary of State. There have been times that I have had to pursue a current or former director for actions they have taken that harmed or could harm my corporate client. As such, directors should keep in mind some basics with regard to communications with units’ owners to avoid potential personal liability.
First, it is a general rule I convey to directors that they should never communicate with units’ owners in between meetings about association business. Why? Units’ owners often do not make the distinction between when a director is acting as a director or acting individually as a units’ owner. Directors have no power individually; the board votes on matters as a whole, and the majority rules. Therefore, no individual director speaking to a units’ owner has any authority to take any action themselves; something the units’ owner is likely unaware of which sometimes results in miscommunication that leads to lawsuits or Ombudsman complaints. Since directors have absolutely no obligation to address units’ owners outside of a meeting, and directors are not protected by indemnification and defense for individual, personal actions, any miscommunication is not worth the personal financial risk. The bottom line: Refrain from communicating with units’ owners about association business in between meetings; that is what you hire management for.
Barbara Holland is a certified property manager (CPM) and holds the supervisory community manager certificate with the state of Nevada. She is an author and educator on real estate management. Questions may be sent to email@example.com.